Saturday, February 27, 2010

Frustrated buyers, Why not take some Action !!!

I have read many stories on this board about House buying related issues. The main one is un-affordability. The second one is scrupulous nature of unregulated business of Builders. Third one is on Banks and Loans.
I was thinking what can be done to make any impact. Here is a simple thought,

Why not write a small petition to Prime Minister of India. On their website, there is online form to write your petition. In my opinion, once you have written it, post what you sent in Comments section. This way other can see what is being sent. lot of comments are posted, we can send link to all Newspaper editors.

Wite to PM



I posted following, Honorable Prime Minister,

I would like to point out one concern from large number of citizens. Today home prices in most urban cities in India has become totally un-affordable to most indians, even those who are well educated and contribute significantly to country's economic growth. In addition to that, buyers face lot of issues like timely delivery and quality construction with un-regulated builder lobby. Home is necessity to everyone. Please do the needful to bring necessary changes.


Please do not use Comments in this post for any other purpose.

17 comments:

shailesh said...

Sent by Shailesh:

Honorable Prime Minister,

I would like to point out one concern from large number of citizens. Today home prices in most urban cities in India has become totally un-affordable to most indians, even those who are well educated and contribute significantly to country's economic growth. In addition to that, buyers face lot of issues like timely delivery and quality construction with un-regulated builder lobby. Home is necessity to everyone. Please do the needful to bring necessary changes.

Anonymous said...

First you abuse the Govt now you coming begging.

Anonymous said...

Problems for Real Estate Sector

1) Price Rise for Cement, Steel
2) Price Rise for Petrol, Diesel resulting in increased transportation costs
3) 10.3% Service Tax on the payments made for Under Construction flats. (Before the completion certificate of the Flat.)

All these factors would make Flats more and more costly and unaffordable for buyers.

Also, the RBI and Banks will not be able to continue restructuring the loans forever, which are given to Builders and Real Estate Companies.

Seeing this high unaffordability, Indian Real Estate would start crashing in coming months.

Buyers, do not buy and do not get trapped.

shailesh said...

Anon at 6:45

Can u point to me any post that abuses Govt.

India claims to have biggest democracy. What is wrong in letting PMO know of reality? What is wrong in complaining about crook builders? If you read the content above, no one is begging. I am only asking to do provide justice to buyers and create proper policies to promote homeownership in India.

My only hope is, many folks who complain on this board, will take one step and at least fill out the webform. We have too many passive citizens, I hope situation changes with Internet.

Anonymous said...

Shailesh - very good post and an kind of walk-the-talk initiative in doing something , taking action rather than just criticizing. One such initiative I started thinking how long we are going to sit and critize, try some alternate routes. And that is coming together, buying land and doing self service rather than getting into trap and waiting - http://dreamhomeinpune.blogspot.com 

Anyways, request other fellow bloggers and visitors to do the same. write to our PM - nothing wrong in it. One more think I have observed, there are many important issues which Govt considers, this is never been and issue and even a concern to any of the Govt . and lets agree we are responsible for that. Any Jhopadpatti people are so united and vote regulalry (with high percentage than middle and upper middle class person living on rent and paying all taxes) on single most condition - local corporator, MLA, MP or whoever he/she may be - should help in regularizing his Jhopadpatti, provide water electricity and basic needs like roads, school, ration etc to community. And here we middle and service class is doing helpless? Noone cares , noone belives that there is any issue or concern? The only concern corporator, MLA, MP is poors do not this and that and Govt should do something. what about us people? They also think, we people (especially IT) have got Jackpot and lot of money just because we pay high taxes and live on high rents? On short we do not vote with some common goal, purpose and do not have union (urban, service class, TAX payers).

Here is my version --

Honorable Prime Minister,

I would like to point out one concern from large number of TAX paying citizens and at the mercy stake of capitalists and investors. Today home prices in most urban cities in India has become totally un-affordable to most educated in urban. Please do the needful towards regularizing this industry and save from builder-Bank-Landowners nexus. Yours Sincerely Tax payer and citizen, Jai Hind!

- Anil

Vinod said...

Hi here is my thought on what we can do ..
There is an organized attempt to perpetuate the myth that property prices will forever go up in a linear fashion. That is one of the main drivers behind people buying property on loan, investors buying up flats at high prices and holding on to the flats creating a scarcity for real buyers.

there needs to be an organized attempt to educate people on the returns one gets from property. Here is my attempt . We need to simplify this story and put it out there.

-----------------------------------

If you have a crore of rupees - and you are toying between keeping it invested or buying property
Here are two scenarios to help you figure out your returns.

Scenario 1 - Money invested and giving 8% return (sure 8% may be considered high - but the
same builder lobby says property will shoot up due to healthy growth in GDP - so they should accept 8%)

Investment 10000000 8% 800000


Scenario 2 - Buy house worth crore - 40 L self funded 60 Lac loan
Return foregone to buy house per year Return foregone to buy house - 20 years
Self funded - return lost 4000000 8% 320000
Loan 6000000 8% 480000
Total Cost - 800000 16000000

Rental per month Rental paid per year Rental over 20 yrs
Rental saved 40000 480000 9600000
Net return
Return per month -320000 Return - 20 years -6400000

Vinod said...

uh huh - something wrong with the formatting there..
basically if the rental of you house is 40K and the "going price is a crore) then you lose money over a period of time.
By the way I pay about 21000 Rs for a house of "Rs.90 Lac" now. If I were the landlord I would sel at Rs. "90 Lacs" instead of get 21K per month and invest that in Fixed deposits .

Anonymous said...

The Government can simply ensure that lot of new schemes are immediately brought in by Development authorities and Housing Boards so that ample of residential land is available to general public. But the problem is that the large developers have nexus with politicians and hence these Authorities are either not bringing up new schemes or if they are bringing in, then with prices as high as the rates escalated by speculators. This is only toensure that general public is compelled to purchase properties from these large developers only, for which scarcity is necessary. This Government is not bothered with any problem of the citizens, especially the middle class. They are just befooling the public, thats all. The PM is not cutting his own expenses and the expenses of ministers, which are eating up the resources generated through Taxpayers money, but increasing the prices of petrol and diesel the prices of which are lifeline for higher inflation. God Help this country.

Anonymous said...

Problems for Real Estate Sector

1) Price Rise for Cement, Steel
2) Price Rise for Petrol, Diesel resulting in increased transportation costs
3) 10.3% Service Tax on the payments made for Under Construction flats. (Before the completion certificate of the Flat.)
4) Teaser Loan Interest Rates have started disappearing.

All these factors would make Flats more and more unaffordable for buyers.

Also, the RBI and Banks will not be able to continue restructuring the loans forever, which are given to Builders and Real Estate Companies.

Seeing this high unaffordability, Indian Real Estate would start crashing in coming months.

Buyers, do not buy and do not get trapped.

Anonymous said...

Problems for Real Estate Sector

1) Price Rise for Cement, Steel
2) Price Rise for Petrol, Diesel resulting in increased transportation costs
3) 10.3% Service Tax on the payments made for Under Construction flats. (Before the completion certificate of the Flat.)
4) Teaser Loan Interest Rates have started disappearing.

All these factors would make Flats more and more unaffordable for buyers.

Also, the RBI and Banks will not be able to continue restructuring the loans forever, which are given to Builders and Real Estate Companies.

Seeing this high unaffordability, Indian Real Estate would start crashing in coming months.

Buyers, do not buy and do not get trapped.

Anonymous said...

Problems for Real Estate Sector

1) Price Rise for Cement, Steel
2) Price Rise for Petrol, Diesel resulting in increased transportation costs
3) 10.3% Service Tax on the payments made for Under Construction flats. (Before the completion certificate of the Flat.)
4) Teaser Loan Interest Rates have started disappearing.

All these factors would make Flats more and more unaffordable for buyers.

Also, the RBI and Banks will not be able to continue restructuring the loans forever, which are given to Builders and Real Estate Companies.

Seeing this high unaffordability, Indian Real Estate would start crashing in coming months.

Buyers, do not buy and do not get trapped.

Sameer said...

Shailesh,

You have done a very good thing by starting this blog. I visited your blog just yesterday. I completely agree with you that government has to do something about it.

At the same time we can also start something like organizing the buyers. By which the buyers will be able to pressurize the builders to reduce the cost. Or together delay the plan to buy a house and not succumb to insecurity of not able to afford a house in future.

I am from Pune, where are you from? We can plan to start a NGO.
Vinod you are invited too.
If you are interested we can start by exchanging contacts. Let me know.

Thanks
Sameer

Vinod Baptist said...
This comment has been removed by the author.
Vinod Baptist said...
This comment has been removed by the author.
Anonymous said...

From Vinod - sure .. my conact is joach@rediffmail.com
Contact me and we can take it offline.

Vinod Baptist said...

Heres my attempt at spreading some information about why it doesnt make sense to buy at the current prices.

http://housingbubbleindia.blogspot.com/2010/03/housing-bubble-in-india.html

Have also created a mailing list on yahoo groups. Please join the group by sending a mail to

housingconsumerinterest-subscribe@yahoogroups.co.in

The plan is to self help and educate other buyers.

rajni sharma said...

Hey this is really very nice post...
Nd one of your best post...Thanks
Flats in kolkata